LONDON (Alliance News) - Film and television producer Entertainment One Ltd Tuesday reported a rise in pretax profit for its most recently ended financial year as its television and family segments continued to offset a weaker performance in film, and gave a positive outlook for its year ahead.
The FTSE 250-listed group said pretax profit for the financial year to March 31 grew to GBP47.9 million from GBP44.0 million, helped by revenue rising to GBP802.7 million from GBP785.8 million. The group will pay a dividend for the year of 1.2 pence per share, up from 1.1p a year earlier.
Acquisitions added GBP21.6 million in group revenue for the year, Entertainment One said.
The company saw 31% growth in revenue in television, helped by higher production levels and higher sales of its owned and acquired content, as well as the acquisition of the Mark Gordon Co, producer of procedural drama series 'Criminal Minds' and medical drama 'Grey's Anatomy'. Entertainment One said 998 half hours of new programming were produced or acquired during the year, compared to 752 half hours in the previous year.
Revenue in its Family segment was up 10%, helped by a strong performance from core brand Peppa Pig. During the year the company acquired a 70% stake in Astley Baker Davies Ltd, the creator of Peppa Pig, giving Entertainment One 85% ownership of the underlying Peppa Pig intellectual property from the beginning of August.
This offset a 7.0% fall in revenue in the company's Film division, hit by lower box office takings, down 16% to USD259 million from USD308 million. Entertainment One attributed the decline to challenging market conditions, lower levels of film releases compared to the previous year, and under performance from some specific titles.
Despite the weaker performance, Entertainment One said it had a number of notable releases in the year, including Oscar-winning journalism drama 'Spotlight' and Quentin Tarantino's 'The Hateful Eight'.
Entertainment One said that during the year it had taken "significant steps" addressing the cost structure of its Film division, and continues to focus on driving margin improvements in the division, which it expects to deliver cost savings of GBP10 million from its financial year 2018.
For the year ahead the company expects its Television division to benefit from organic growth as well full year contributions from acquisitions, whilst its Family division will continue to focus on building the Peppa Pig brand.
For Film, Entertainment One expects its film slate to deliver a "significant pick-up" in its box office performance alongside a recovery in the independent film market. It has 220 films planned for release in the year ahead, and its slate includes a number of high profile releases, including Steven Spielberg's 'The BFG' and 'The Girl on the Train', an adaptation of a best-selling book.
The company proposed a final dividend of 1.2 pence, up from the 1.1 pence it paid the year before.
Entertainment One reiterated that it is on track to double the size of its business over the five years to 2020 following its GBP201 million rights issue last October and the issuance of GBP285 million in senior secured loans last December, which it said have put the "appropriate long-term financing structure in place" to support its organic growth strategy.
"The foundations for growth are in place, with eOne's key capability for high quality content generation allowing the focus to move to delivery of organic growth across the business," said Chief Executive Darren Throop.
"With consumer demand continuing to grow, we anticipate that audiences will increasingly focus on the quality of the content that they consume, gravitating towards premium television series, film and speciality genres. This market dynamic plays to Entertainment One's strengths and supports our strategic goal to double the size of the business over the five years to 2020," he added.
Shares in Entertainment One were down 1.2% at 178.00 pence Tuesday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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